Amid climate change concerns, consumers willing to pay more for sustainable products

Amid growing global concern over extreme weather and its environmental repercussions, Bain & Company has released new research indicating that over 60 percent of businesses are falling short of their current sustainability goals. Notably, an increasingly conscientious consumer and employee base may play a pivotal role in this process.

Bain’s recent study delves into the primary sustainability concerns confronting business leaders, their customers, and their employees. François Faelli, Partner and Head of the Global Sustainability Practice at Bain & Company, emphasized the critical role executives acknowledge in the energy and resources transition. However, concerns loom regarding the widening gap between actual progress and public commitments. Faelli highlighted three key levers CEOs must prioritize: policy, technology, and behavior.

To gauge worldwide environmental concerns, Bain conducted a survey of 23,000 consumers. The results underscore a growing sense of urgency surrounding sustainability issues, with 64 percent expressing heightened concern, particularly triggered by recent instances of extreme weather.

Bain's research has unearthed surprising truths about consumer attitudes, challenging common misconceptions. Contrary to the belief that younger consumers are more focused on sustainability, the study reveals that baby boomers are often just as concerned as Gen Z. Moreover, both liberals and conservatives share environmental concerns, with variances in specific issues. While consumers express willingness to pay a premium for sustainable products, barriers persist, and consumer behaviour can evolve swiftly, influenced by external factors such as government regulations.

Consumers willing to pay more, but barriers persist

A significant disconnect emerges between consumer preferences and what companies offer, as evidenced by 48 percent of consumers prioritizing how products are used in sustainability considerations. This discrepancy leads to the perception that sustainable living is too expensive, particularly among developed-market consumers.

Lack of trust

Consumers' struggle to identify sustainable products is compounded by a lack of trust in corporations. While 50 percent of consumers prioritize sustainability in their purchase criteria, misconceptions persist. Trust in large corporations to create genuinely sustainable products is low, contrasting with greater trust in small, independent businesses.

Bain identifies four critical focus areas for companies amid this shifting landscape: developing a future-proof and flexible strategy, acknowledging a fragmented consumer base, embracing a test-and-learn approach, and proactively engaging with evolving regulations.

In the realm of employee upskilling, Bain's findings reveal that 75 percent of business leaders believe sustainability is not sufficiently embedded in their businesses. The study advocates for addressing skill gaps through a combination of upskilling and cultivating a learning mindset. Despite the acknowledgment of a talent problem by CEOs, the survey indicates that companies are yet to define what it means to be a great employer.